Less dependence on imported oil catapults to priority status in economy

Antonio V. del Rosario, executive director of the Philippine National Oil Company and assistant secretary of the Ministry of Energy, handed over the handsomely printed document: "Ten-year Energy Program 1980-1989."

"We are trying to confront the energy crisis in this country," he said. "Our intent with this program is to set a target and blueprint for ourselves. It is not a forecast."

The basic goal is to reduce the nation's heavy dependence on imported oil. At present, some 92 percent of the nation's commercial energy is derived from petroleum (240,000 barrels daily), and of this oil, only 8 percent (18,000 barrels) comes from domestic wells.

That imported oil cost $1.5 billion last year. With the higher prices introduced by the member nations of the Organization of Petroleum Exporting Countries, petroleum is expected to cost some $2 billion this year. That oil bill has been throwing a monkey wrench into the nation's economic plans, enlarged the balance-of-payments deficit, and offset rapid increases in export volume.

"It is like walking on a treadmill," complained G. S. Licaros, governor of the Central Bank of the Philippines.

The energy program, with its slick paper, complicated charts, and handsome color photographs, outlines an ambitious program for dramatic increases in the production of geothermal energy, hydro and mini-hydro power, alcogas (gasohol), coal, and nonconventional energy sources. The program also counts on some expansion in domestic oil production.

For instance, hydro power last year composed 6.4 percent of the national energy mix. It should reach 12.8 percent by 1989, the program suggests. Coal should increase from 0.7 percent to 12.2 percent in the same time span; geothermal from 1.5 to 7.2 percent; nuclear from nothing to 3.5 percent; and nonconventional from nothing to 8.1 percent.Domestic oil should grow from 10 percent to 25.5 percent and imported oil slip from 81.4 percent to 30.7 percent.

Those are extremely rapid changes. It is also expected to take place while energy consumption increases from 91.9 million barrels of oil equivalent last year to 184.62 million in 1989. Energy demand per Filipino is expected to rise from about 2 barrels of oil now to 3.24 barrels by 1989, reflecting rising standards of living. That compares with US consumption per capita (1977) of 58 barrels.

Nonetheless, a group of visiting Shell Oil Company experts from London praised the program. "If you can accomplish anything like that, you will be as exciting as Brazil . . . well on your way to energy independence," said Thomas Hart, group planning coordinator for Shell.

Of course, there are uncertainties in the program. For instance, it is not known just how successful current domestic oil exploration will prove (see accompanying article).

Certainly the government does seem serious in its drive for greater energy independence. Only in July, President Ferdinand E. Marcos ordered a revision of the national budget for 1981 to give priority to energy development. Some $780 million per year is to be spent over the next six years in the areas of geothermal, coal, mini-hydro, and alcogas (20 to 30 percent alcohol).

Coal mines in the nation are to be opened faster. Cement plants are to convert from oil to coal more quickly -- by the end of 1981 instead of three years hence. The drilling of geothermal wells and installation of generating plants to use the steam is to be stepped up. The plan had called for 1,200 megawatts of geothermal power by the end of the decade. This is now to be done in five years instead.

Of course, whether an already ambitious energy program can be speeded up further without serious bottlenecks or inefficiencies remains to be seen. However, the government does have going for it a group of highly educated young executives running the Philippine National Oil Company (PNOC).

Mr. Rosario, for example, has an undergraduate degree from Columbia University and a masters of business administration from the Wharton School at the University of Pennsylvania. Other executives, listing their background, came from such schools as Texas A&M, Harvard, New York University, as well as the Asian Institute of Management, the top business school in the Philippines.

The state-owned company had revenues last year of $1.6 billion. Assets at the end of 1979 were $1.2 billion. Profits were only $42 million, which, as Mr. Rosario admitted, "is not anything to shout about."

The company, however, has been assigned some activities by the government which are not yet, at least, profitable. It explores for uranium. It has been developing coal mines and geothermal power sites, and looking into the use of alcohol as a fuel. It has been exploring for oil on land and had less success than other companies doing offshore exploratin.

"We have been putting our money into more pioneer programs," said Mr. Rosario. "That is a more constructive direction for our efforts."

PNOC also markets some 38 percent of the petroleum products sold in the country, facing competition from such private companies as Caltex, Shell, and Mobil.